WASHINGTON (12/30/13)--The Credit Union National Association and its partner members of The Clearing House coalition will be in court Jan. 17 to present 10 minutes of oral arguments in the ongoing debit interchange case known as NACS, et al. v. Board of Governors of the Federal Reserve System.
The court ruled Friday that CUNA and TCH members will be allowed to present their views, along with the Fed and the merchants group, during the already-scheduled oral arguments for the Fed's appeal to uphold its rule. The Fed is assigned 15 minutes for oral arguments and the merchants have 25 minutes.
In this case, a merchants' coalition has challenged the Fed's implementation of a Dodd-Frank Act-imposed debit interchange cap as too high. CUNA and its partner maintain that the cap, in fact, is too restrictive.
CUNA and it financial services partners have argued that the Fed cap does not factor in enough of the costs that card issuers face for providing their services.
"(T)he statute states clearly that the full 'cost' incurred by an issuer 'with respect to' an electronic debit transaction may be recovered through an interchange fee," CUNA noted in an earlier amicus brief.
The current Fed debit interchange fee cap limits fees for issuers with assets of $10 billion or more to 21 cents, and allows an additional five basis points per transaction to be charged to cover fraud losses. An extra penny may be charged by financial institutions that are in compliance with established fraud prevention standards.
The interchange regulations, overturned by a lower court, remain in effect as the court case moves forward on the Fed's appeal.
Circuit Judges David Tatel, Harry Edwards, and Stephen Williams will hear the appeal.
CUNA's partners in TCH coalition are the: American Bankers Association, Consumer Bankers Association, Electronic Payments Coalition, Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, National Association of Federal Credit Unions, and National Bankers Association.